- USD/CAD built on the previous session’s late rebound from multi-week lows.
- A goodish pickup in the USD demand prompted some short-covering move.
- Oil prices consolidated recent gains and did little to influence the loonie.
The USD/CAD pair edged higher through the early European session on Tuesday and is currently placed near the top end of its daily trading range, around the 1.3170 region.
The pair regained some positive traction on Tuesday and built on the previous session’s goodish intraday bounce of around 45 pips from the vicinity of the 1.3100 handle, or seven-week lows amid a modest pickup in the US dollar demand.
Despite the latest optimism over the partial US-China trade deal, China’s lack of enthusiasm turned investors’ sceptic about the future trade relations between the world’s two largest economies and benefitted the greenback’s safe-haven status.
It is worth recalling that under the agreement, the US suspended planned tariffs and will reduce some tariffs on Chinese goods. China, in exchange, will increase purchases of agricultural, manufactured and energy products from the US.
Meanwhile, a subdued price action around oil prices did little to influence demand for the commodity-linked currency – loonie or hinder the pair’s goodish intraday positive move, back within the striking distance of the 1.3200 round-figure mark.
The recent bullish run oil prices seemed to have run out of the steam amid doubts over the effectiveness of the OPEC decision to take as much as 2.1 million barrels or 2.1% per day off global oil supplies in the first quarter of 2020.
It will now be interesting to see if the pair is able to capitalize on the recovery momentum or meets with some fresh supply at higher levels amid absent relevant market-moving economic releases, either from the US or Canada.
Technical levels to watch
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